Research & Policy

As two trends collide—increasing use of debit cards among young adults and increasing use of abusive overdraft practices among major banks—college students and young workers just starting their adult lives are paying a high price. At least one hundred universities are contributing to this problem by selecting a single bank and granting them exclusive marketing privileges on campus. Such an...

Committee: Joint Economic Committee

Committee: U.S. Senate Subcommittee on Interstate Commerce, Trade & Tourism

Summary Frequently Asked Questions Session Law On August 16, 2007, Governor Mike Easley signed into law the NC Predatory Lending Law, House Bill 1817. This law passed with strong support, and was endorsed by major financial organizations across the state as well as the Coalition for Responsible Lending. The law bans abusive lending practices that have contributed to the current...

Session Law (pdf) Frequently Asked Questions House Bill 1374, the "Protect Homeowners & Reduce Foreclosures" law, passed unanimously in both the North Carolina House and Senate and was signed into law by Governor Easley on August 16, 2007. This law makes the foreclosure process fairer and helps protect NC homeowners from abusive practices by the companies that collect and process...

Session Law (pdf) Frequently Asked Questions House Bill 1374, the "Protect Homeowners & Reduce Foreclosures" law, passed unanimously in both the North Carolina House and Senate and was signed into law by Governor Easley on August 16, 2007. This law makes the foreclosure process fairer and helps protect NC homeowners from abusive practices by the companies that collect and process...

On August 16, 2007, Governor Mike Easley signed into law the NC Predatory Lending Law, House Bill 1817. This law passed with strong support, and was endorsed by major financial organizations across the state as well as the Coalition for Responsible Lending. The law bans abusive lending practices that have contributed to the current subprime mortgage foreclosure crisis. This new...

Committee: U.S. House Committee on Financial Services Subcommittee on Financial Institutions and Consumer Credit

In a system enormously out of balance, fees for abusive overdraft loans have reach $17.5 billion per year, more than the loans themselves, which now amount to $15.8 billion per year. CRL's report, "Out of Balance," finds that abusive overdraft loans, once the exception, are now the rule in a system where not-sufficient funds (NSF) fees–historically used to discourage overdrafts—have...

Testimony of Michael D. Calhoun before U.S. Senate Committee on Banking, Housing and Urban Affairs - Subcommittee on Housing, Transportation, and Community Development

The Federal Reserve Board held a public hearing under the Home Ownership and Equity Protection Act (HOEPA) on June 14 2007, to gather information on how it might use its rulemaking authority to curb abusive lending practices in the home mortgage market, including the subprime sector.

The payday industry's "new" guidelines are already proven failures. Any reliance on them for legislative reforms will also fail. In states that have legislated these guidelines, the debt trap persists. Nearly two of every three loans still go to borrowers with twelve or more loans per year and less than one percent of transactions use the "mandatory" payment plan. The...

Overdraft lending: the problem Our nation's major banks and credit unions are making unsolicited, high-cost loans to their checking account holders when their account balance dips below zero, generating enormous fees for the banks and frequently driving their customers deeper into the negative. Financial institutions never have to reveal that customers pay triple- and quadruple-digit interest rates. They make overdraft...

Testimony before the U.S. House Committee on Financial Services Subcommittee on Financial Institutions and Consumer Credit

This study (published in the March-April edition of the Journal of Economics and Business) examines whether borrowers’ race and ethnicity affect subprime loan pricing after accounting for objective determinants, including credit scores and loan-to-value ratios. The results show that African-American and Latino borrowers are more likely to receive higher-rate subprime home loans than non-Latino white borrowers. The authors are Debbie...

Federal Reserve System's Fifth Community Affairs Research Conference "Financing Community Development: Learning from the Past, Looking to the Future" The best outcomes for consumers require a competitive market, fair opportunities, and a policy framework that makes both possible. The optimization of a policy framework along these lines is often most limited by the quality of information available concerning market realities...

"Yeah, people got bad mortgages. But others were able to finally buy a home" begins a recent article in a national magazine, repeating the common assumption that subprime mortgage lending has helped increase the overall level of homeownership. But a new CRL analysis shows that while the subprime market has produced more than $2 trillion in home loans over the...